BOOK REVIEW: Phil Knight's NIKE

BOOK REVIEW

Title:                  SHOE DOG

                             A MEMOIR BY THE CREATOR OF NIKE

Author:             PHIL KNIGHT

Publisher:        SIMON & SCHUSTER   (UK)

 A CBS Company, 2016

Price:                 Rs. 599/-

Phil Knight’s Nike: Sports Shoes & Apparel Designed For Victory

Phil ‘Buck’ Knight, the founder/ principal owner of Nike, the $ 30 billion plus global corporation with NYSE stock prices hovering in the $57 per share region, will retire as Chairman this year. This is after a straight run since 1962, a full 52 years in the saddle.

This book blends anecdote, musing, philosophy, humour, with Phil Knight’s hard-nosed dynamism and good business sense. It ends on a  counterpoint however, because Knight and his wife Penelope, reminiscent of the Odysseus legend, gained the world but lost their grown first born son to a scuba diving accident.  Fortunately, they do have a surviving second son.

A ‘Shoe Dog’ is the term for a character obsessed with everything to do with shoes, from its materials and technical design/construction, to its image, appearance, quality, durability, performance, celebrity endorsements, and sales.

Knight, a University of Oregon track athlete, with a graduate degree from Oregon, a masters’ in business from Stanford, a year in the US Army, and later, a CPA too, tells a tenacious tale. It is replete with an abiding passion for sports and a romance with the sporting psyche, particularly track and tennis.

 Nike, assessed with a brand value of $19 billion in 2014, and its predecessor, the Tiger running shoes, and later the Cortez and Boston, took on the reigning German market leaders, Puma and Adidas. 

By 1980, Knight’s corporation and its many models of athletic and sports shoes had captured 50% of global market share. The company grew to encompass several others making not only other kinds of sports shoes but apparel too. And pretty soon, there were Nike factories all over the world and a host of celebrity users of the products.

In 1962, it was only a serious track athlete who bought running shoes, as jogging as a form of recreational exercise, involving millions of new shoes in demand, had not yet caught on. And the concept of wearing sports shoes and elements of sports clothing all the time, including shoes from brands like the stylish Converse Inc., still a Nike subsidiary today, had not yet arrived.

Phil Knight’s Portland, Oregon based Blue Ribbon Sports Company, the name inspired by Knight’s own track trophies, began by selling running shoes imported from manufacturers Omitsuka  of Kobe, Japan. He sold the Tiger, at first from the boot of his car, at track meets, and from home, via word-of-mouth.

The ‘crazy idea’ to bring in and sell imported Japanese running shoes, first came to Knight at Stanford. And its key premise was that Japanese running shoes, sourced properly, were of good enough quality to compete with the German market leaders, and could beat them on price.

In the sixties, there were no VCs (Venture Capitalists), and so Phil Knight started his business with a small loan from his father.  

Later, again purely on the strength of his father’s reputation, Knight secured a small line of credit with The First National Bank, one of two banks extant in Portland.

 The 24 year old Knight went to Japan, via Hawaii, on the way out, and managed to secure a trial distributorship, initially just for the West Coast of America, immediately placing a sample order.

When the shoes arrived, Knight sent a pair to his own track coach, the formidable and famous Bill Bowerman, who coached the US Olympic track team to many gold medal wins. Bowerman understood the needs of runners from the inside out, and was always modifying sports shoes to suit. He modified the Tigers and later created the updated Cortez  and Boston to take on Adidas. 

But it all began because Bowerman was impressed with the Tiger in the first place. So much so, that that he offered to become Knight’s 49% partner. And so, Blue Ribbon Sports Company was born.

Turnover for year one was a modest $ 8,000, but it doubled every year, with Knight ploughing back all his earnings into fresh inventory.

Even though today Nike employs 68,000 people world-wide, it was predictably hard going at first. Financially, matters improved dramatically once giant Japanese trading house Nissho Iwai began to  finance and assist Knight with sourcing. And this on a trading basis, without ever wanting to buy in.

Phil made the most of that very first overseas open ticket to Japan. He paid for it from a salary selling mutual funds in idyllic Hawaii, where Knight stopped for a spell on the way out. On the way back, he stopped again, in Hong Kong, India and Italy. But he was most impressed with Greece, specifically Athens, which gave him a sense of déjà vu. The Parthenon seemed to speak to him, as did the temple of Athena Nike,  the Greek goddess of victory.

But, the brand Nike, was actually born when Knight was trying to launch on his own due to Onitsuka’s mixed signals on his distributorship for its Tigers. Onitsuka was trying to throw over the agreement, by now for the whole of the US, after Knight had established the network.

The relationship between the two ended up in court, each accusing the other of breach of contract. After a mighty wrangle, Knight and Blue Ribbon won and Nike, born out of such difficulties, was finally free and clear.

 The Nike name and logo was invented for the running shoes manufactured by Nippon Rubber of Japan, to design and specifications provided by Knight and his associates. Bowerman, for example, invented a unique ‘waffle sole’ patented and incorporated from the start.  But all of it, including the tick mark, ‘whoosh’ logo, and orange shoe-box packaging, wasn’t created till 1971.

The financing demands growing ever larger, Blue Ribbon, with nil collateral, was always butting heads with its banker. But once Knight found Nissho Iwai and created Nike to replace Tiger, there was no looking back. It is Nissho Iwai that sourced Nippon Rubber to make the first Nikes. Later, multiple factories were geographically diversified over many countries.

By 1973, the sales figure was at $4.8 million. And by 1980, when Nike went public, Phil Knight became a rich man with a net worth of $178 million.

The tick mark ‘whoosh’ logo developed by young graphic designer Carolyn Davidson, was in place from the birth of Nike in 1971, but the iconic “Just do it” slogan came only in 1988, eight years after the company went public.

It was coined by Dan Weiden, for an advertising campaign developed by  Weiden + Kennedy. It was, in time, voted one of the top 5 ad slogans  of the 20^th century by Advertising Age, and is  enshrined in the Smithsonian Museum to  this day.

For: The Sunday Pioneer, BOOKS

(1,101  words)

May 11^th,2016

Gautam Mukherjee